Asian stocks rally on Fed cut bets, $A up on jobs data

Asian stocks gained on Thursday, tracking Wall Street's tech-led rally overnight after an as-expected reading of US consumer inflation cemented bets for a Federal Reserve interest-rate cut next week.

Japan's Nikkei topped 40,000 for the first time since mid-October, led by advances in chip-sector shares. The exporter-heavy index also got a boost from a weakening yen, as traders pared bets for a Bank of Japan rate hike next week.

The Australian dollar surged after employment data topped estimates by a wide margin, rebounding from Wednesday's weakness following a Reuters report that Beijing is considering allowing the yuan to depreciate further next year. China is Australia's top trading partner and the Aussie is often used as a liquid proxy for the yuan.

The yuan held its ground above a one-week low after the central bank set a marginally stronger official fixing.

The tech-heavy Nikkei jumped 1.5 per cent, while the broader Topix climbed 1.2 per cent.

South Korea's KOSPI added 0.7 per cent, while Taiwan's benchmark gained one per cent.

Hong Kong's Hang Seng advanced 0.4 per cent, and mainland blue chips were 0.2 per cent higher.

Overnight, the tech-focused Nasdaq shot up 1.8 per cent to close above 20,000 for the first time, while the S&P 500 climbed 0.8 per cent. Futures for both indexes , however, pointed to 0.2 per cent declines.

The US consumer price index rose 0.3 per cent last month, the largest gain since April, but exactly as forecast by economists in a Reuters poll and not hot enough to derail Fed officials from normalising policy, analysts said.

"The US CPI print lit a flame in US equity," said Chris Weston, head of research at Pepperstone.

"The market has essentially seen one of the last remaining obstacles that could derail sentiment out of the way", he said, "seeing the coast somewhat clearer for the illustrious seasonal chase of returns to play out into year-end."

Traders now lay 97 per cent odds on a quarter-point Fed cut on December 18.

The US dollar held firm near a two-week high, boosted by higher Treasury yields as data showing a widening US budget deficit spurred caution on debt.

US 10-year Treasury yields rose on Thursday to 4.2828 per cent, the highest since November 27.

Major peers the euro and franc were under pressure ahead of expected cuts of as much as half a percentage point at the European Central Bank and Swiss National Bank later in the day.

The US dollar index, which measures the currency against the euro, franc, yen and three other major rivals, was little changed at 106.51 after touching 106.81 on Wednesday for the first time since November 27.

The euro ticked up 0.1 per cent to $US1.05065 after dipping to a one-week trough overnight.

The US dollar eased 0.1 per cent to 0.88345 Swiss franc.

It slipped 0.2 per cent to 152.11 yen, edging back from a two-week high hit Wednesday on the back of a Bloomberg report that BOJ officials see "little cost" in waiting to hike rates again. Market-implied odds on a quarter-point increase on December 19 last stood at 27 per cent.

The yuan added 0.2 per cent to 7.2670 per dollar in offshore trading .

Gold rose to a more than one-month high amid the promise of lower bond yields as the Fed and other major central banks ease policy. It reached $US2,725.79 for the first time since November 6 before pulling back to $US2,710.45.

US crude hovered near a two-and-a-half week peak amid the threat of additional sanctions stifling Russian oil output.

US West Texas Intermediate crude futures last traded at $US70.20 per barrel, down nine cents from Wednesday, when it rose as high as $US70.53 for the first time since November 25.

Brent crude futures eased three cents to $US73.49 a barrel.